Dubai's index tumbled to a six-year low and Oman saw its largest drop in two years on Monday as widening protests in the sultanate and a steep drop in Saudi stocks a day earlier sparked a sell-off on Gulf markets. Dubai dropped 3.8 per cent to its lowest finish since June 2004. Volumes hit a four-week high and were triple those of Sunday, indicating rising selling pressure. "Aside from political factors, interest rates are rising and the cost of borrowing in the region is going up which is not good for banks and the overall economy," said Eric Swats, head of asset management at Rasmala Investments. Contractor Drake & Scull fell 9.6 per cent, Emaar Properties dropped 6.3 per cent and telecoms operator du DU.DU shed 3.4 per cent. Saudi Arabia's index, TASI was down 0.8 percent at 1110 GMT, sliding to a new nine-month low after falling 5 percent on Sunday. "Yesterday's Saudi selling was mostly by local retail and high net worth individuals," said a Dubai-based analyst who asked not to be identified. "The trigger was unclear, but I think it was a pile-up in risk over the weekend. Events in Bahrain, Yemen and Oman broke the camel's back - investors saw the market wasn't going to rally, so thought it better to sell now and potentially buy back at lower levels in a couple of weeks time. That had a ripple effect on other Gulf markets today." Oman's index .MSI fell 4.9 per cent to a seven-month low in its biggest decline since Jan. 28, 2009. Bank Muscat BMAO.OM dropped 8.8 per cent and Bank Sohar BKSB.OM slid 8.6 per cent. Omani protesters demanding political reforms blocked roads to a main export port and refinery on Monday and a doctor said the death toll from clashes with police in the sultanate had risen to six. The health minister said one person had died. "People are now beginning to realise potential revolutions are now on the doorstep of the Gulf Cooperation Council, whereas previously they were one step removed," said the Dubai analyst. "The consensus view two weeks ago was that the GCC was entirely immune, but events in Oman and Bahrain have shown that it is susceptible and people are trying to work out how much further unrest will penetrate the GCC." Qatar's index .QSI fell 3.2 per cent to its lowest finish since Nov. 4. Barwa Real Estate dropped 5.8 per cent and Commercial Bank of Qatar lost 2.8 per cent. Egypt's market will re-open on Tuesday. It has been closed since 27 January after popular protests that ultimately ended former president Hosni Mubarak's 30-year rule. Traders forecast many stocks will open at their maximum downward limit. "If Egypt had re-opened immediately after Mubarak's fall, there would have been a celebration rally, with people willing to buy from a trading perspective, before having to figure out how Egypt's political situation will be resolved," says Akram Annous, MENA strategist at Al Mal Capital. "It would have been an easy buy, but we're now more than two weeks later, the euphoria has passed and we don't know what will happen to companies that benefitted from their closeness to the former regime. Will there be reconciliation or a witch hunt?"
